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Compare current accounts

A current account lets you store, spend and transfer your money day to day. Current accounts often come with a debit card, an overdraft and an app to manage your money digitally. Not sure which type of current account is right for you? Visit our banking guides and banking news sections. Ready to compare products? Select a page below and start comparing providers. 

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Current account types

Note

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Disclaimer

All overdrafts are subject to the applicant’s status. You may not be offered credit. All rates and fees are subject to change without notice. Please check all rates and terms before borrowing.

Current accounts explained

At a glance

  • There are a range of current account types offering different benefits to different people. 
  • Most accounts come with a cash card or debit card. You may also be offered a cheque book and the option to have an agreed overdraft.
  • Some current accounts come with monthly or annual fees. Make sure you know how much your bank will be charging you and when.
  • A credit check will be performed when you open a new current account so be sure that your credit score is as healthy as possible beforehand.

What is a current account?

A current account lets you keep your money in a safe place while still allowing you to spend it, transfer it, use it to pay bills and have more added to it. Current accounts usually come with a cash or debit card, which you can use to make purchases or withdraw money from your account. They may also have an agreed overdraft facility (essentially a form of credit should you need it). 

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Types of current account

The different account types of current accounts that are available to adults are:

 

Standard accounts

Standard current accounts, which offers you all the 'standard' account features, but nothing extra. These accounts may or may not charge a monthly or annual fee.

 

High interest current accounts

High interest current accounts offer you a competitive interest rate on funds up to a certain balance and/or monthly cashback for keeping your account in credit. These accounts may come with monthly fees, and will likely require a certain income and number of standing orders or direct debits, but could offer you some extra cash on a monthly basis if you use them well.

 

Bank accounts for bad credit

Basic or guaranteed accounts can be helpful for those with a bad credit history or those that do not want to have an overdraft. These types of bank accounts often do not require a credit check.

These accounts while accessible, may charge certain fees either as a regular charge and/or for transactions.

 

Current accounts with overdrafts

Current accounts with overdrafts include a facility to borrow money in the short term from your bank. If you use your overdraft then you will normally be charged interest on the amount used. You should agree an overdraft arrangement with your bank before going overdrawn.

 

Free current accounts

Some current accounts won't charge you a monthly fee although they are likely to still charge fees and/or interest for overdrafts. These may also offer interest on credit balances and may also have funding requirements. 

 

Packaged bank accounts

A packaged bank account is a current account that includes additional products and services – such as breakdown cover, mobile phone insurance, travel insurance, home emergency cover – exclusive access to other products from the bank, for example an exclusive rate of interest on a savings account and retailer offers and discounts. These accounts usually charge a monthly fee. Read our guide to packaged bank accounts to learn more. 

 

Student current accounts

Designed to meeting the financial needs of students, student bank accounts tend to offer the same features as standard bank accounts alongside interest-free overdrafts and student incentives such as discounted rail travel. 

Organising insurance and breakdown policies individually

As an alternative to packaged bank accounts, you may want to organise insurance and breakdown cover individually. Learn more and apply direct today.

Home insurance

UK breakdown cover 

Home emergency cover

Who is a current account suitable for?

The world of banking has evolved with different types of current accounts designed to suit the needs of different types of people. For example those with a poor credit history can now open an account with a range of banking services, such as accepting direct debits and includes a card to make online and instore payments. Those looking for the best perks and incentives will now find it easier to switch current accounts and can do this in seven days thanks to the Current Account Switching Guarantee. 

 

How to choose a current account

Now that you've got some idea of what current accounts there are to choose from, you'll have to determine which is the best current account for you. This will of course depend on your personal circumstances. If you're often overdrawn, you'll likely be drawn to an account with overdraft facilities. If you never go overdrawn, on the other hand, you might want to take advantage of a high interest current account instead.

If you're looking for the best current account that gives you something back, a switching incentive might lure you in with some offering up to £125 to switch. However, a little bit extra every month might work out as more lucrative over the long run, so you may want to consider a cashback or interest-paying current account instead. Regardless, remember that a lot of incentives will require you to close your old account, so you can't just open an extra account for a cash offer.

Whatever you are after, make sure to compare current accounts on all their features, not just their benefits, otherwise you might find that a cashback offer is undone by a high account or overdraft fee. Once you've made your choice, it's easy to switch bank accounts, especially thanks to the Current Account Switch Service and its accompanying guarantee. Read our current account switching guide to find out which providers offer it – you'll find that almost all do nowadays.

 

What to compare when choosing a current account

The cost and value of fees

Some types of bank account charge fees, for example a packaged bank account has a monthly fee to offset the cost of additional products and services bundled with the account. You should consider if you will use the add-ons included in a packaged account and if so if it is good value to pay the monthly fee. 

Those bank accounts designed for those with bad credit may also charge fees, often a monthly fee and some transaction fees. In this case, the account provider is looking to cover its operating costs and generate profit.

There are current accounts that don't charge fees, but they may require you to deposit a specific sum of money each month to qualify.  

 

The amount of funding required

You may be required to pay in a minimum amount of money per month. Usually, this restriction is applied to high interest current accounts, which offer a decent in-credit interest rate in exchange for your commitment and regular income. Aside from a minimum monthly funding amount, these accounts may require you to hold several direct debits on it, to make sure your account with them is your main banking product.

 

The credit interest you could earn

If you are likely to have a credit balance then a high interest current account may be better for you. These current accounts usually offer a higher rate of interest than standard current accounts usually up to a set balance.  Above this, interest may not be paid at all, or at a very low rate, so you may want to maximise your returns by placing any money above this amount in a separate savings account. Note that these accounts do tend to come with high overdraft rates, so you should only consider an account that offers credit interest if you’re not someone who regularly goes overdrawn.

 

The cost of an overdraft

If you are likely to dip into the red on your current account, you should consider one that charges a low rate for arranged overdrafts or offers you an interest-free tier before you get charged. This can prove to be very valuable if your income and outgoings are nearly the same and your account balance goes near or below zero on a regular basis.

 

How you want to use the account

Current accounts from challenger banks are usually only accessible by an app or the internet. Some bank accounts will also offer access to your account through retail locations such as the Post Office, this is handy if you need to pay cash into your account. 

Most high street current accounts can be operated across a range of channels including phone, branch, online and app. 

 

Cost for cash

If you need to withdraw cash from cash machines you should also check the cost to do this. You can also find cash machines near to you using the LINK ATM locator.

Should I get a savings account or a current account?

There is a different purpose for a savings account to a current account. A current account has more functions than a savings account, designed to facilitate your day to day needs to pay bills and pay for goods and services. Whereas a savings account is designed to help you build deposits over time and reward your efforts in interest.

What is the Current Account Switch Guarantee Service?

The Current Account Switch Guarantee Service facilitates the moving of regular payment such as standing orders and direct debits to your new bank account. The service should take care of doing this for you and if something goes missing you should be protected. The switching service will not set up paperless statements or your account’s marketing preferences. You will still need to do this. You should also check that you have enough direct debits, etc in place to meet any criteria required for your bank account. Read our guide on the switching service to learn more.  

Current Account FAQs

How many current accounts can you have?

You can open multiple current accounts with a number of different banks. Remember though that if these each need a credit check, your credit score may be affected by multiple applications in quick succession.

Can I get a free current account?

Yes, there are free current accounts available. Just select 'Free in the relevant search box and all current accounts that come without monthly or annual fees will be selected. These accounts will still charge fees for overdrafts and for some other types of transactions.

What happens if I go over my agreed overdraft limit?

The column 'Overdraft Rate' will show you the rate that you are charged if you go into an arranged overdraft. Unarranged overdrafts must not be charged at a higher rate than arranged overdrafts. You can find both the arranged and unarranged overdraft charges for each account by clicking on 'Further Details'. Your overdraft limit will be determined by your credit history – your provider may change it depending on whether and how you use it. Read our guide to current account overdrafts to learn more. 

How do bank account providers make their money?

While providers use the funds in bank accounts to lend to others in the form of loans and overdrafts, gaining interest (and therefore money) in return, if a good rate of interest is offered on the account, they naturally make less money from it. That’s why these accounts tend to come with fees and/or high charges, such as for  overdrafts or bounced cheques.

They also take a cut of each debit card payment made (called the interchange fee) and make money from fees and charges for things like overdrafts, refusing a payment due to a lack of funds in the account or using a debit card abroad, where they may charge a fee and make a profit on any currency exchange rate they offer.

Since some banking providers are more keen to gain custom than others, there can be huge differences in the benefits versus charges on offer across the market. That’s why it’s always a good idea to compare deals to find the best account for you – and to review your account occasionally. As bank account providers change their deals quite often, usually without adjusting the deal their current customers are getting, it pays to keep a weather eye on the market.

How do digital only banks work?

There are a growing number of online-only banks; some of these are challenger banks such as Atom, Starling and Monzo, while others are brands that are part of a larger banking group. There are also fintechs that offer banking type services but are in fact a payment services provider rather than a bank. These online banks and services do not have any branches. Find out more about how online and digital banking apps work and how safe they are.

Can I open a current account online?

Typically speaking, yes, you’ll be able to open a bank account online. The vast majority of banks offer the convenience of online applications, though some will still insist that you bring your ID into a branch for them to make copies. However there are some digital-only banks – such as Starling and Monzo – that operate entirely online and/or via mobile app, so if online capability is important to you, they could be well worth considering. Find out more about the best digital-only banks.

How to find the best banks in the UK

The best way to find the bank account that’s going to meet your needs is to compare the options. You’ll need to consider which kind of account you’re looking for – for example, do you want an account that comes with an overdraft, a packaged account, one with high rates of in-credit interest, or perhaps a basic bank account if your credit history is lacking? – and from there you’ll need to consider the options available. Our charts can be one of the best ways to compare current accounts, so should always be the first port of call.

Image of Ashley Seager

Ashley Seager

Digital Marketing Manager

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